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Ex-Officio Members W . P. G. HARDING, GOVERNOR P A U L M. WARBURG, V ic e Go ve r n o r FREDERIC A. DELANO ADOLPH C. M IL L E R ^ \ ._ CHARLES S. H AM Llfk — H S • WILLIAM G. McADOO SECRETARY OF THE TREASURY C h a ir m a n JOHN SKELTON W ILLIAM S COMPTROLLER OF THE CURRENCY FEDERAL RESERVE B O A R D H. PARKER W IL L IS , SECRETARY SHERMAN P. ALLE N . ASST. SECRETARY a n d F is c a l A g en t WASHINGTON ADDRESS REPLY TO FEDERAL RESERVE BOARD March 13, 1917. Dear Sir: On the l4th ultimo a circular letter, No. 1078, was sent to all Federal reserve hanks suggesting that the discount rates quoted by the various banks be simplified. Replies have been received from practically all the banks expressing cordial approval of the Board’s suggestion. It appears from the correspondence, however, that a majority of the Federal reserve banks would prefer quotations for paper maturing from 16 to 60 days, and 6 l to 90 days, rather than from l6 to 30 days and 31 to 90 daysi The majority of the banks also have indicated a desire that in the case of trade acceptances, commodity paper, and bankers' acceptances, the quotation should be made for maturities not ex ceeding 90 days, instead of from 30 to 90 days. Having considered these suggestions, the Board has decided to approve discount rates to be established for paper of the character and maturities as fol lows: 1. Paper maturing within 15 days, including col lateral notes; 2. Paper maturing within l6 to 60 days; 3> Paper maturing within 6 l to 90 days; 4. Trade acceptances maturing within 60 days; 5. Trade acceptances maturing within 90 days; 6. Bankers' acceptances maturing within SO days; r> - 2 - 7. Commodity paper maturing within 90 days; S. Agricultural paper maturing within 9^ to 180 days. The rate to he approved for hankers' acceptances will not he a fixed or definite one, hut will he for "not less than ___f> nor more than __ j >", so that within the limitations thus established there will he ample provision for a fluctuating market rate., - as heretofore, In the matter of trade acceptance rates the Board has distinguished between paper maturing within oO days and paper ma turing between 6l to 90 days, so as to admit of a distinct rate for each maturity. It is thought that some Federal reserve hanks may wish to establish such a differential, so as to correspond with any difference that may exist between their 60 and 90 day rates for commercial paper, hut the matter is entirely optional with them, and experience will determine whether it will he advisable perma nently to make this distinction. Wherever the 15 day rate is the lowest of all the rates established by a Federal reserve hank, such rate would apply to trade acceptances, commodity paper, or to bankers' acceptances ma turing within the 15 day limit. The Board advises that at your next Directors' meeting, your discount rates be adjusted in so far as may be necessary to harmonize them with this uniform plan, which all Federal reserve banks are requested to adopt. Very t r u l y y o u rs, f G overnor.
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